Logo
Munich Personal RePEc Archive

Cumulative Innovation, Sampling and the Hold-Up Problem

Pollock, Rufus (2006): Cumulative Innovation, Sampling and the Hold-Up Problem.

[thumbnail of MPRA_paper_5022.pdf]
Preview
PDF
MPRA_paper_5022.pdf

Download (297kB) | Preview

Abstract

With cumulative innovation and imperfect information about the value of innovations, intellectual property rights can result in hold-up and therefore it may be better not to have them. Extending the basic cumulative innovation model to include `sampling' by second-stage firms, we find that the lower the cost of sampling, or the larger the differential between high and low value second-stage innovations, the more likely it is that a regime without intellectual property rights will be preferable. Thus, technological change which reduces the cost of encountering and trialling new `ideas' implies a reduction in the socially optimal level of rights such as patent and copyright.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.